Playtech H1 earnings jump 64% fuelled by growth in the Americas and Europe
Despite positive headline figures, the FTSE 250 B2B and B2C company’s shares slide 7% in early trading
Playtech CEO Mor Weizer said his firm “performed ahead of our expectations” as revenue surged 73% (71% in constant currency) year-on-year (YoY) to €792.3m (£690.3m) for the first six months of 2022.
As a result, EBITDA leapt 64% (60% cc) to €203.8m while adjusted post-tax profit came in at €94.3m, a rise of 73% (41% cc).
The London-listed company put the strong performance down to regulated B2B markets as growth in the Americas and Europe (ex-UK) rose 50% (37% cc) and 39% (39% cc), respectively.
In fact, the contribution to growth in the Americas by Caliente in Mexico was described as “outstanding”, while the Netherlands, Ireland, UK, Poland and Spain were singled out for praise.
B2B revenue – driven by “very strong growth within regulated markets” – reached €312m, a rise of 17% (13% cc).
Snaitech, the company’s B2C division, also received praise due to adjusted EBITDA soaring 143% compared with H1 2021 and revenue rocketing 182%.
This was powered by the reopening of retail venues in Italy where Snaitech “maintained its number one position by brand across retail and online sports betting”.
Revenue for its other B2C brand HAPPYBET, in Germany and Austria, was up 26%, again driven by the reopening of retail sites.
Weizer commented: “I am delighted with the positive start that the group has made in the first half of 2022, delivering a financial performance ahead of our expectations with significant strategic and operational progress made against our objectives.
“Our success in the period was powered by our B2B business in the Americas and Europe, alongside yet another excellent contribution from Snaitech.”
On the Americas, he said: “We continue to make great strides in executing our US strategy, launching with Parx Casino in Pennsylvania, signing several exciting deals with leading global and US brands, and progressing additional licence applications.
“The Americas remain one of the group’s biggest growth drivers, with continued strongrevenue growth in Mexico as well as Brazil complemented by new launches and partnerships in the US, Canada and Peru.”
As for “unregulated Asia”, Playtech reported a 22% decline in revenue YoY partly due to the impact of further lockdowns in China and Malaysia.
“Other unregulated”, which excludes Asia, was flat in H1, with growth in Brazil and Canada offset in part by a decline in Germany due to regulatory changes.
In July, the provider completed the $250m sale of financial trading arm Finalto to Gopher Investments, a move which Playtech said will “simplify the group” and intensify its focus on “high-growth B2B and B2C gambling markets”.
Meanwhile, the company referenced the deal with Caliente to allow Caliplay to enter the US market, with Caliplay being acquired by a US-listed SPAC.
However, Playtech reiterated that market conditions have “deteriorated significantly since the transaction was initially contemplated” and therefore the deal is “no longer being pursued in the same manner”.
“Alternative approaches to facilitate Caliente entering the US market are being evaluated,” the business stated in its earnings presentation.
An uncertain macroeconomic outlook, as well as managing the impact of Russia’s invasion of Ukraine – where Playtech employs 700 people – were highlighted as challenges, yet the group said it remains confident about its future prospects.
Playtech shares were down 7% to 441p in early trading.
The firm’s stock is down 28% in the past six months after multiple potential takeovers bids for Playtech were abandoned.